I invoice several manufacturers for commissions against sales. On occasion rather than receive payment we deduct it from the amount due for goods and they take the commissions as payment, how do we record our invoices as being paid?

Thanks for confirming - just wanted to make sure I was on the same wavelength before directing you

In this case you would use a holding bank account. Basically you have a bank account (either one generic “Holding Account” or one per supplier - depending on your situation), and mark both invoices as paid from this bank account.

For example, let’s say I invoice my supplier £25 for recent commission. If they are holding this on account rather than pay me, I simply mark the invoice as paid from the holding account. Then, when they invoice me, I mark £25 paid from the same holding account and it cancels out.

You don’t have to leave it in the holding account either if you don’t want to - you could mark it as paid to the supplier as a pre-payment once you mark the sales invoice as paid. As you would have a money in and a money out transaction for the same value, they would cancel out.

Hope that helps, but please do let me know if you have any further questions.